Healthy Times for 7-Eleven

C-store giant named No. 1 franchisee, signs deal with Weight Watchers

Published in CSP Daily News

By  Mitch Morrison, Vice President & Group Editor

DALLAS -- Lean and green. That mojo of 7-Eleven was given new weight with concurrent announcements that the nation's largest c-store chain has captured Entrepreneur magazine's prestigious top franchisee opportunity in the magazine's 2008 Franchise 500 rankings, besting previous champ Subway and Dunkin' Donuts, which rounded out the top three finishers.

In addition, 7-Eleven further ramped up its embrace of healthy on-the-go items, inking a deal with Weight Watchers International Inc. to carry snack cakes and muffins at 7-Eleven stores. The news items [image-nocss] accentuate a succeeding transition launched two years ago when Seven-Eleven Japan took full control of the quintessential American c-store and brought in Joe DePinto to steer a dramatic cultural shift based on a franchise-exclusive retail platform enabled by a "servant leadership" headquarters in Dallas.

"It's all about our franchisees and providing them a turnkey solution," DePinto told CSP Daily News yesterday of the Entrepreneur honor. "It's wonderful recognition for us...and the work of our franchisees."

The results come after 7-Eleven has finished in the top 10 an impressive 16 times. "After researching hundreds of opportunities, 7-Eleven rose to the top based on their strong growth, financial stability and long-term commitment to franchising," Rieva Lesonsky, Entrepreneur's editor director/senior vice president, said in a statement. "Their ranking is particularly significant since they're a new No. 1 titleholder in the Franchise 500 for the first time in seven years."

The only other convenience chains to rank in the Top 500 were Circle K (No. 17) andBP Connect (now BP's am/pm network; No. 35).

Click here to view the complete results of Entrepreneur's 29th annual study.

With a U.S. network of more than 7,300 locations, 7-Eleven is hardly the only convenience chain fielding a robust retail network. Yet it was the only c-store to rank in the top 100 of Entrepreneur's annual ranking.

Asked what distinguishes 7-Eleven from other franchise-based operations, DePinto didn't hesitate. "Our franchisees have a vested interest in the business," he said. "We buy the land, the equipment and we provide the accounting system. If you don't have a good accounting system, it's pretty tough."

With franchisees further abetted by corporate training, a robust retail transaction tracking system and daily deliveries, DePinto added, "if you take all of that and treat the customer rightyou've built goodwill. You can [later] sell and gain equity."

Elaborating on that point, he noted, "Most other franchisees out there, when you leave, you leave." 7-Eleven franchisees who sell their business receive an equity payment.

"So it's in their interest to really build their equity," added company spokesperson Margaret Chabris.

Healthy Times

Building a healthy business that has ushered unprecedented tranquility between franchisee and corporate clearly benefits the independent 7-Eleven store merchants. Meanwhile, building a healthier foodservice offering is benefiting consumers.

The agreement with Weight Watchersthe weight-loss specialists that in recent years have moved into licensing its name on food itemsextends 7-Eleven's line that currently features fresh fruits, salads and healthy sandwiches.

"As a convenience store retailer, we want to provide products that will enable [consumers] to meet their healthy, wellness and safety needs," DePinto said.

For New York City-based Weight Watchers, the move is coupled with extended portion-control cheese and soft-baked cookies into grocery stores. Stacy Gordon, the company's vice president of licensing and products, told Reuters that foods with Weight Watchers' name are expected to generate $500 million in sales this year, up 150% from fiscal 2005. "It's a big growth business for us," she told the news service.

As for 7-Eleven, DePinto fully expects good-for-you products to grow in c-stores. "It's a good thing for our business; it's a good thing for America."

By Mitch Morrison, Vice President & Group Editor
View More Articles By Mitch Morrison